23 June 2015: Bloomberg New Energy Finance (BNEF) has published its New Energy Outlook (NEO) 2015, which is a long-term forecast of the global energy sector. BNEF emphasizes five “seismic shifts” projected in the electricity sector over the next 25 years, based on analysis of expected demand, costs of generation and structural changes to the electricity system. The authors predict $12.2 trillion will be invested in global power generation through 2040, with 78% invested in emerging markets and 66.7% in renewables.

The first of the five shifts is that declining costs of solar photovoltaic (PV) technology will result in a US$3.7 trillion surge in PV investment. The second shift is one toward distributed generation, as US$2.2 trillion of the PV investment will be in rooftop and local PV systems. This is accompanied by a third trend toward energy efficient technologies, allowing global power demand to slow to 1.8% per year, as compared to 3% annually in 1990-2012.

Fourthly, NEO 2015 predicts that gas will not be the “transition fuel” to renewables as many thought; while it may be true in the US, many developing countries will largely continue to develop coal alongside renewables instead of gas.

Lastly, on climate, Michael Liebreich, BNEF Advisory Board Chairman, said NEO 2015 “shows that we will see tremendous progress towards a decarbonized power system” but “emissions [will continue] to rise for another decade and a half, unless further radical policy action is taken.” This is despite the Outlook’s projected US$8 trillion investment in renewables; the report finds the legacy of fossil fuel infrastructure will leave emissions levels at 13% above 2014 levels in 2040. [BNEF Press Release] [NEO 2015 Website] [Publication: New Energy Outlook 2015: Executive Summary]